DICTIONARY OF TRADE TERMS

DICTIONARY OF TRADE TERMS
The intent of this dictionary was to
produce a broad listing of terms, which
are commonly used in trade negotiations
and especially within the context of the
Free Trade Area of the Americas (FTAA)
with a view to providing an information
tool for the public at large. The dictionary
is presented in the four official languages
of the
FTAA: English, Spanish, Portuguese and Fr
ench.
The compilation does not attempt to
present the entire universe of terms used
nor does it seek to prejudge or to affect in
any way definitions or approaches
currently proposed by any country in any
trade negotiation. In fact, many of the
definitions included in the publicly-
available Draft FTAA Agreement which are
still the subject of difficult debates have
been excluded from this dictionary. The
definitions are based on widely available
source material including other trade
agreements.
An alphabetical listing of the terms is
included to facilitate the use of the
dictionary. The terms and their definitions
are presented by general negotiating
theme found in the FTAA and in other
trade negotiations.

An electronic version of this document can
be found on the following
websites: IADB, OAS, andECLAC.

IADB

OAS

ECLAC
GENERAL TERMS
TERM DEFINITION
Americas
Business Forum
(ABF)

Parallel event organized by the business community at the time of the meeting
of Ministers Responsible for Trade in the Hemisphere participating in the
negotiations of the Free Trade Area of the Americas
(FTAA).
Americas Trade
and Sustainable
Development
Forum
Parallel event organized by civil society organizations at the time of the
meeting of Ministers Responsible for Trade in the Hemisphere participating in
the negotiations of the Free Trade Area of the Americas
(FTAA).
Andean
Community
(CAN)

Formerly known as the Andean Group (established in 1969) and the Andean
Common Market, the Andean Community (CAN) is a sub-regional organization
made up of Bolivia, Colombia, Ecuador, Peru and Venezuela and the bodies and
institutions comprising the Andean Integration System (AIS). The key objectives
of the Andean Community are: to promote the balanced and harmonious
development of the member countries under equitable conditions; to
stimulate growth through integration and economic and social cooperation; to
enhance participation in the regional integration process with a view to the
progressive formation of a Latin American common market; and to strive for a
steady improvement in the standard of living of their
inhabitants.
Asia-Pacific
Economic
Cooperation
(APEC)
Established in November 1989, the Asia-Pacific Economic Cooperation (APEC) is
the premier forum for facilitating economic growth, cooperation, trade and
investment in the Asia-Pacific region. APEC members (21) are: Australia, Brunei
Darussalam, Canada, Chile, People’s Republic of China, Hong Kong, China,
Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua
New Guinea, Peru, the Philippines, the Russian Federation, Singapore, Chinese
Taipei, Thailand, United States, and Viet Nam.
Business
facilitation
measures
In the context of the FTAA, set of measures approved by Ministers Responsible
for Trade at their Toronto Meeting, held on November 4, 1999. These include
eight customs-related measures and ten transparency-related measures, which
can be found in Annexes II and III of the Toronto Ministerial
Declaration.

Caribbean
Community and
Common Market
CARICOM is a grouping of 15 member countries that was established by the
Treaty of Chaguaramas in 1973 to promote economic integration through the
free movement of goods and functional cooperation in areas such as education
(CARICOM) and health. The Treaty was revised in 2001 to elevate the common market into
an economic union, the Caribbean Single Market and Economy (CSME), which
envisions the free movement of goods, services, capital and labor,
macroeconomic policy coordination and harmonization of laws and
institutions. Member (15) countries are: Antigua and Barbuda, The Bahamas,
Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint
Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname,
Trinidad and Tobago. The Bahamas is a member of the Community but not the
Common Market. Associate members (3) include: Anguilla, British Virgin
Islands, Turks and Caicos Islands.
Central American
Common Market
(CACM)
The Central American Common Market (CACM) was established on 13
December 1960 when Guatemala, El Salvador, Honduras, and Nicaragua signed
the General Treaty of Central American Economic Integration. Costa Rica
acceded on 23 July 1962. In October 1993, the five CACM countries signed the
Guatemala Protocol, which amended the 1960 General Treaty. The Protocol
redefines the objectives, principles and stages of economic integration, and
calls on members to establish a customs union. More specifically, the
Guatemala Protocol calls on members to bring the free trade area of the CACM
into full operation through the gradual elimination of tariff and non-tariff
barriers, the granting of national treatment to intraregional trade, and the
adoption of a regional legal framework covering rules of origin, safeguards,

unfair trade practices, intellectual property, services, sanitary and
phytosanitary measures, and standards and technical
regulations.
Common Market
of the South
(MERCOSUR)
Established as the Common Market of the South (MERCOSUR) through the
Treaty of Asuncion on 26 March 1991. Between 1991 and 1995, MERCOSUR
members, Argentina, Brazil, Paraguay and Uruguay, engaged in a series of
negotiations to establish a common external tariff, which took effect on 1
January 1995. The deadline for full implementation of the customs union by all
members in all sectors is 2006. The re-launching of MERCOSUR’s integration
process in 2000 called for closer macroeconomic coordination and other areas
of prioritization such as institutional strengthening, the common external tariff,
dispute settlement, trade remedies and competition policy, and investment
incentives. Chile and Bolivia became associate members, respectively, in 1996
and 1997.
European Union
(EU)
The European Union (EU) groups fifteen member states through a set of
common institutions where decisions on specific matters of joint interest are
taken at the European level. It was founded as the European Community after
the Second World War to enhance political, economic and social co-operation
among its members. The ‘single market’, adopted in 1992 through the Treaty
of Maastricht, is the core of the present European Union. It includes the
freedoms of movement for goods, services, people and capital and is
underpinned by a range of supporting policies. A common currency, the ‘Euro’,
which replaced the old national currencies in 12 EU countries, along with a
European Central Bank, came into existence on 1 January 2002. Member states
(15) include: Austria; Belgium; Denmark; Finland; France; Germany; Greece;

Ireland; Italy; Luxembourg; Netherlands; Portugal; Spain; Sweden; United
Kingdom of Great Britain and Northern Ireland. Ten new member countries
have been invited to join the EU on 1 May 2004, namely: Cyprus, the Czech
Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and
Slovenia.
Free Trade Area
of the Americas
(FTAA)
The Heads of State and Government of the 34 democracies in the hemisphere
agreed to construct a Free Trade Area of the Americas (FTAA), in which barriers
to trade and investment will be progressively eliminated. The negotiations
were launched at the Summit of the Americas in Miami, U.S.A., in December
1994. They agreed to complete negotiations towards this agreement by
January 2005.
FTAA website The official public website for the negotiating process of the Free Trade Area of
the Americas.
General
Agreement on
Tariffs and Trade
(GATT)
The General Agreement on Tariffs and Trade (GATT), has been superseded as
an international organization by the World Trade Organization. An updated
General Agreement is now one of the WTO’s agreements. See “World Trade
Organization”, page 16.
General
Agreement on
Trade in Services
(GATS)
The General Agreement on Trade in Services (GATS) is the first multilateral,
legally binding set of rules covering international trade in services. The GATS

came into effect in January 1995 as an integral part of the WTO. The workings
of the GATS are the responsibility of the Council for Trade in Services, made up
of representatives from all WTO members.
Hemispheric
Cooperation
Program (HCP)
The Hemispheric Cooperation Program (HCP) aims to strengthen the capacities
of those countries seeking assistance to participate in the FTAA negotiations,
implement their trade commitments, and address the challenges and maximize
the benefits of hemispheric integration, including productive capacity and
competitiveness in the region. The Program includes a mechanism to assist
these countries to develop national and/or sub-regional trade capacity building
strategies that define, prioritize and articulate their needs and programs
pursuant to those strategies, and to identify sources of financial and non-
financial support for fulfilling these needs. The HCP was endorsed by the FTAA
Ministers Responsible for Trade at their meeting in Quito, in November
2002.
Inter-American
Development
Bank (IDB or
IADB)
Established in 1959, the Inter-American Development Bank (IDB) supports
economic and social development and regional integration in Latin America
and the Caribbean. It does so mainly through lending to public institutions, but
it also funds some private projects, typically in infrastructure and capital
markets development. Members (46) include: Argentina, Austria, The
Bahamas, Barbados, Belgium, Belize, Bolivia, Brazil, Canada, Chile, Colombia,
Costa Rica, Croatia, Denmark, Dominican Republic, Ecuador, El Salvador,
Finland, France, Germany, Guatemala, Guyana, Haiti, Honduras, Israel, Italy,
Jamaica, Japan, Mexico, Netherlands, Nicaragua, Norway, Panama, Paraguay,

Peru, Portugal, Slovenia, Spain, Suriname, Sweden, Switzerland, Trinidad and
Tobago, United Kingdom, United States, Uruguay and
Venezuela.
Latin American
Association for
Integration
(ALADI)
The Latin American Association for Integration (ALADI) was established by the
Treaty of Montevideo in August 1980 and became operational in March 1981.
The Association seeks to foster economic cooperation among its members,
including through the conclusion of regional trading agreements and sectoral
agreements. Members (12) include: Argentina, Bolivia, Brazil, Chile, Colombia,
Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela. ALADI
replaced the Latin American Free Trade Association (LAFTA; Asociación
Latinoamericana de Libre Comercio), which had been established in 1960 with
the aim of developing a common market in Latin
America.
Ministerial
meeting
The periodic meeting of the Ministers Responsible for Trade of the 34
participating countries in the Free Trade Area of the Americas negotiations.
National
Strategies to
Strengthen Trade
Capacities
In the context of the FTAA Hemispheric Cooperation Program, countries have
developed national or regional strategies that define, prioritize, and articulate
their needs related to strengthening their capacity for: preparing for
negotiations; implementing trade commitments and adjusting to integration. In
order to facilitate coordination and sharing of experiences, the strategies

follow a common format that was developed by the Consultative Group on
Smaller Economies, with the assistance of the Tripartite Committee.
Organization for
Economic
Cooperation and
Development
The Organization for Economic Cooperation and Development (OECD) groups
30 member countries in a unique forum to discuss, develop and refine
economic and social policies. Established December 1960 and came into being
in September 1961. Members (30) include: Australia, Austria, Belgium, Canada,
(OECD) Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland,
Ireland, Italy, Japan, South Korea, Luxembourg, Mexico, Netherlands, New
Zealand, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland,
Turkey, United Kingdom and the United States.
North American
Free Trade
Agreement
(NAFTA)
The North American Free Trade Agreement (NAFTA) is a comprehensive free
trade agreement involving Canada, Mexico, and the U.S., implemented on 1
January 1994. Its objectives include: to eliminate barriers to trade in, and to
facilitate the cross-border movement of goods and services; to promote
conditions of fair competition; to increase investment opportunities; to provide
adequate and effective protection and enforcement of intellectual property
rights; to create effective procedures for the implementation and application
of the Agreement, for its joint administration and for the resolution of
disputes; and to establish a framework for further trilateral, regional and
multilateral cooperation.
Organization of
American States

(OAS)
On 30 April 1948, the Charter of the Organization of American States (OAS) was
adopted by 21 nations of the hemisphere. It affirmed their commitment to
common goals and respect for each nation’s sovereignty. Since then, the OAS
has expanded to include the nations of the Caribbean, as well as Canada.
Through the Summit of the Americas process, the Heads of State and
Government in the hemisphere have given the OAS important responsibilities
and mandates, including: human rights; participation of civil society; improving
cooperation to address the problem of illegal drugs; supporting the process to
create a Free Trade Area of the Americas; education; justice and security.
Members (35) include: Antigua and Barbuda, Argentina, the Bahamas,
Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Cuba
(excluded from formal participation since 1962), Dominica, Dominican
Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras,
Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis,
Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago,
the United States, Uruguay and Venezuela.
Summit
Implementation
Review Group
(SIRG)
The Summit Implementation Review Group (SIRG) was created in March 1995
with the purpose of coordinating and implementing the mandates of the
Miami Plan of Action. The SIRG is comprised of the 34 democratically elected
governments of the hemisphere, which are represented by their appointed
National Coordinators. The SIRG is responsible for reporting annually on the
progress achieved in the fulfillment of the Plan of Action to the Foreign
Ministers. The Ministers review the information on the occasion of the Regular
Session of the OAS General Assembly.
Summit of the

Americas
The Summit of the Americas process, begun after the first Summit of the
Americas in December 1994, brings together the Heads of State and
Government of the Western Hemisphere to discuss common concerns, seek
solutions and develop a shared vision for their future development of the
region, be it economic, social or political in nature. mit-
americas.org
Tariff elimination
program
Tariff elimination schedules of the countries participating in a trade agreement.
Trade capacity
building
Development and enhancement of trade-related capacities and core skills of
countries through technical cooperation and other forms of assistance to
optimize their participation in negotiations, implement their trade
commitments, and address the challenges to maximize the benefits of
hemispheric integration. See Hemispheric Cooperation Program, page 13.
Trade
Negotiations
Committee (TNC)
As part of the Free Trade Area of the Americas process, the Trade Negotiations
Committee (TNC), made up of Vice Ministers of Trade, oversees and manages
the FTAA negotiating process. The TNC has the responsibility of guiding the
work of the FTAA negotiating groups and special committees, and of deciding
on the overall architecture of the agreement and institutional issues.
Treatment of the
differences in the
level of
development
and size of the

economies
Principle that grants countries of differing levels of size and development the
possibility to obtain different treatment in the context of the FTAA
negotiations. The guidelines for this treatment are set out in the FTAA Trade
Negotiations Committee document entitled “Guidelines or Directives for the
Treatment of the Differences in the Levels of Development and Size of
Economies”.
Tripartite
Committee (TPC)
The Tripartite Committee (TPC) consists of the Inter-American Development
Bank (IDB), the Organization of American States (OAS) and the United Nations
Economic Commission for Latin America and the Caribbean (ECLAC). It provides
analytical, technical and financial support to the FTAA process and maintains
the official FTAA Website. The Tripartite institutions also provide technical
assistance related to FTAA issues, particularly for the smaller economies of the
Hemisphere.
U.N. Economic
Commission for
Latin America
and the
Caribbean
The Economic Commission for Latin America and the Caribbean (ECLAC) is one
of the five regional commissions of the United Nations. It was founded for the
purposes of contributing to the economic development of Latin America,
coordinating actions directed towards this end, and reinforcing economic
relationships among the countries and with the other nations of the world. The
(ECLAC) promotion of the region's social development was later included among its
primary objectives. Members (41) include: Antigua and Barbuda, Argentina,
Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica,
Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, France, Grenada,

Guatemala, Guyana, Haiti, Honduras, Italy, Jamaica, Mexico, Netherlands,
Nicaragua, Panama, Paraguay, Peru, Portugal, Saint Kitts and Nevis, Saint Lucia,
Saint Vincent and the Grenadines, Spain, Suriname, Trinidad and Tobago,
United Kingdom, United States, Uruguay and Venezuela. Associate members
(7) include: Anguilla, Aruba, British Virgin Islands, Montserrat, Netherlands
Antilles, Puerto Rico and United States Virgin Islands.
United Nations
Commission on
International
Trade Law
(UNCITRAL)
Established in December 1966, the United Nations Commission on
International Trade Law (UNCITRAL) aims to further the progressive
harmonization and unification of international trade law. Members (36)
include: Argentina (alternating annually with Uruguay), Austria, Benin, Brazil,
Burkina Faso, Cameroon, Canada, China, Colombia, Fiji, France, Germany,
Honduras, Hungary, India, Iran, Italy, Japan, Kenya, Lithuania, Mexico,
Morocco, Paraguay, Romania, Russian Federation, Rwanda, Sierra Leone,
Singapore, Spain, Sudan, Sweden, Thailand, The former Yugoslav Republic of
Macedonia, Uganda, United Kingdom and the United
States.
United Nations
Conference on
Trade and
Development
(UNCTAD)
Established in 1964, the United Nations Conference on Trade and Development
(UNCTAD) aims to enhance the integration of developing countries into the
world economy. UNCTAD is the focal point within the United Nations for the
integrated treatment of trade and development and interrelated issues in the

areas of finance, technology, investment and sustainable development.
Members (192) include all members of the United Nations plus the Holy
See.
Uruguay Round
of Multilateral
Trade
Negotiations
Launched in September 1986, in Punta del Este, Uruguay, the eighth round of
multilateral trade negotiations encompassed a wide-ranging negotiating
agenda that covered many new trade policy issues. The resulting agreement,
concluded in December 1993 and signed in April 1994, extended the
multilateral trading system into several new areas, notably trade in services
and intellectual property rights, and brought the important sectors of
agriculture and textiles under multilateral trading rules. The Uruguay Round
resulted in the establishment of the World Trade Organization in January
1995.
World Customs
Organization
Established in 1952 as the Customs Co-operation Council, the Council adopted
the working name World Customs Organization (WCO) in 1994, to more clearly
(WCO) reflect its transition to a truly global intergovernmental institution. The WCO is
an independent intergovernmental body whose mission is to enhance the
effectiveness and efficiency of customs administrations worldwide. With 159
member governments, it is the main intergovernmental organization with
competence over customs matters.
World
Intellectual
Property
Organization
(WIPO)

Established in1967, the World Intellectual Property Organization (WIPO) is an
international organization dedicated to promoting the use and protection of
literary, artistic and scientific works. WIPO is one of the 16 specialized agencies
in the United Nations system. It administers 23 international treaties dealing
with different aspects of intellectual property protection. The Organization
counts 179 nations as members.
World Trade
Organization
(WTO)
The World Trade Organization (WTO) succeeded the General Agreement on
Tariff and Trade (GATT) on 1 January 1995. It is the only multilateral
organization that serves as a negotiating forum for the liberalization of trade, a
body to oversee the implementation of multilaterally agreed and binding trade
rules and a forum for the resolution of trade disputes. The objective of the
WTO is to promote the liberalization and expansion of international trade in
goods and services under conditions of legal certainty and predictability. The
WTO has 146 members.
AGRICULTURE
TERM DEFINITION
Aggregate measure of support
for agricultural production
(AMS)
The AMS refers to an index that measures the monetary value of
the extent of government support to a sector. The AMS, as
defined in the WTO Agreement on Agriculture, includes both
budgetary outlays as well as revenue transfers from consumers to
producers as a result of policies that distort market prices.
Amber box of domestic support
measures (WTO Agreement on
Agriculture)

For agriculture, the domestic support measures considered to
distort production and trade (with some exceptions) are classified
under a category called amber box. Under the WTO Agreement
on Agriculture, countries adopted commitments to reduce the
total value of these measures.
Blue box of domestic support
measures (WTO Agreement on
Agriculture)
These measures refer to government support payments directly
linked to the use of acreage or number of animals in agricultural
production. It includes schemes which limit production by
imposing production quotas or requiring farmers to set aside part
of their land. The few countries using these subsidies argue these
subsidies distort trade less than alternative amber box subsidies.
These types of measures are exemptions from the general rule
that all subsidies linked to production must be reduced or kept
within defined minimal (“de minimis”) levels.
Cairns Group of Agriculture
Exporting Countries
A group of nations formed in 1986 at Cairns, Australia. The group
seeks the removal of trade barriers and substantial reductions in
subsidies affecting agricultural trade. These goals were in
response to depressed commodity prices and reduced export
earnings stemming from subsidy controversies. The members
account for a significant portion of the world’s agricultural
exports. The group includes major food exporters from both
developed and developing countries: Argentina, Australia, Brazil,
Canada, Chile, Colombia, Hungary, Indonesia, Malaysia, New
Zealand, the Philippines, Thailand, and Uruguay. The Cairns Group
was a strong coalition in the Uruguay Round of multilateral trade

negotiations.
Codex Alimentarius Commission The Codex Alimentarius Commission was created in 1963 by FAO
and The World Health Organization (WHO) to develop food
standards, guidelines and related texts such as codes of practice
under the Joint FAO/WHO Food Standards Programme. The main
purposes of this Programme are protecting health of the
consumers and ensuring fair trade practices in the food trade,
and promoting coordination of all food standards work
undertaken by international governmental and non-
governmental organizations.
Common Agriculture Policy of
the European Union (CAP)
The CAP defines the European Union’s agriculture policy and is
comprised of a set of rules and mechanisms, which regulate the
production, trade and processing of agricultural products in the
EU, with attention being focused increasingly on rural
development. Among the European Union's policies, the CAP is
regarded as one of the most important policy areas.
Decoupled income support Decoupled income support programs refer to payments to
farmers which are not linked to current production decisions. In
this manner, when payments are decoupled, they are directed to
support farmers’ income so farmers make production decisions
based on expected market returns.
Deficiency payments to support Policies to complement a price support system where the
agricultural production government guarantees that producers would receive a fixed
target price each year. In such a system, market prices are
allowed to be determined by supply and demand. The difference
between market prices and target prices is made up by a
government payment directly to producers.
Domestic support measures for

agricultural production
Subsidies granted for the domestic production of agricultural
goods. These subsidies are granted for the benefit of products
regardless of whether those products are exported or not.
Export credits on agricultural
products
Governments provide official export credits through Export Credit
Agencies (ECAs) in support of national exporters competing for
overseas sales. ECAs provide credits to foreign buyers either
directly or via private financial institutions benefiting from their
insurance or guarantee cover. ECAs can be government
institutions or private companies operating on behalf of the
government. This system refers, therefore, to selling exports on
credit rather than for cash payment. Many countries promote
exports by providing either subsidized export credit or guarantees
on more favorable terms than can be obtained commercially.
Export taxes This refers to taxes that are imposed on export products. They
can be collected directly from exporters or indirectly through a
government marketing board that pays producers a price lower
than the world price. In this manner, the export tax forces the
price in the exporting country below the world price by the
amount of the tax.
Export subsidies on agricultural
products
Export subsidies are special incentives provided by governments
on products destined for foreign markets to encourage increased
foreign sales. Accordingly, export subsidies refer to subsidies
which are contingent on export performance. They may take the
form of, for example, cash payments, disposal of government
stocks at below-market prices, subsidies financed by producers or

processors as a result of government actions such as
assessments, marketing subsidies, transportation and freight
subsidies, and subsidies for commodities contingent on their
incorporation in exported products.
Food aid Food aid refers to shipments of food commodities from donor to
recipient countries on a total-grant basis or on highly
concessional terms.
Genetically modified
agricultural products
The modification of the genetic characteristics of a
microorganism, plant or animal by inserting a modified gene or a
gene from another variety or species. Genetically modified
organisms (GMOs) may be microorganisms designed for use as
biopesticides or seeds that have been altered genetically to give a
plant better disease resistance or growth.
Green box of domestic support
measures (WTO Agreement on
Agriculture)
Green box domestic support measures refer to measures that are
considered to have minimum or no effect on trade. They include
support measures such as research, extension, food security
stocks, disaster payments, and structural adjustment programs.
Green box measures are not subject to reduction commitments
under the WTO Agreement on Agriculture.
Price bands This is a policy instrument that introduces a duty to protect or
buffer the domestic market from lower international prices. It
consists of setting upper and lower levels of prices of imported
commodities (the band) to decide on the application of a
compensatory mechanism (e.g. tariff duties) in cases when the
international price of a given agriculture product falls below the

lower price band level.
Risk assessment Risk assessment refers to procedures to evaluate the likelihood of
entry, establishment or spread of a pest or disease within the
territory of an importing country according to the sanitary or
phytosanitary measures which might be applied, and of the
associated potential biological and economic consequences; or
the evaluation of the potential for adverse effects on human or
animal health arising from the presence of additives,
contaminants, toxins or disease-causing organisms in food,
beverages or feedstuffs.
Sanitary and Phytosanitary
Measures (SPS)
Any measure applied: (i) to protect animal or plant life or health
within the territory of a country from risks arising from the entry,
establishment or spread of pests, diseases, disease-carrying
organisms or disease-causing organisms; (ii) to protect human or
animal life or health within the territory of a country from risks
arising from additives, contaminants, toxins or disease-causing
organisms in foods, beverages or feedstuffs; (iii) to protect
human life or health within the territory of a country from risks
arising from diseases carried by animals, plants or products
thereof, or from the entry, establishment or spread of pests; or
(iv) to prevent or limit other damage within the territory of a
country from the entry, establishment or spread of pests. Sanitary
or phytosanitary measures include all relevant laws, decrees,
regulations, requirements and procedures including, inter alia,
end product criteria; processes and production methods; testing,
inspection, certification and approval procedures; quarantine
treatments including relevant requirements associated with the
transport of animals or plants, or with the materials necessary for

their survival during transport; provisions on relevant statistical
methods, sampling procedures and methods of risk assessment;
and packaging and labeling requirements directly related to food
safety.
Special agricultural safeguard
regime
Provisions within the Uruguay Round (WTO) Agreement on
Agriculture designed to protect products which were subject to
tariffication from surges in imports or large price declines.
State trading enterprises on
agricultural products
Governmental and non-governmental enterprises officially
granted the function of importing and/or exporting agricultural
products.
WTO Agreement on Agriculture The Agreement on Agriculture is one of the 29 individual legal
texts included in the Final Act under an umbrella agreement
establishing the WTO. It was negotiated in the 1986–94 Uruguay
Round and is a significant first step towards fairer competition
and a less distorted sector. It includes specific commitments by
WTO member governments to improve market access and reduce
trade-distorting subsidies in agriculture. These commitments
have an implementation period over a six year period (10 years
for developing countries) that began in 1995.
WTO Agreement on the
Application of Sanitary and
Phytosanitary Measures
(WTO/SPS Agreement)
The Agreement on the Application of Sanitary and Phytosanitary
Measures (the “SPS Agreement”) entered into force with the
establishment of the World Trade Organization on 1 January

1995. It concerns the application of food safety and animal and
plant health regulations.

COMPETITION POLICY
TERM DEFINITION
Abuse of dominant
position
Anticompetitive business practices in which a dominant
firm may engage in order to maintain or increase its
position in the market. These business practices by the
firm, not without controversy, may be considered as
“abusive or improper exploitation” of monopolistic
control of a market aimed at restricting competition.
Although they may include practices such as charging
excess prices, price discrimination, predatory pricing,
refusal to deal/sell, tied selling, etc., which of the
different types of business practices are considered as
being abusive will vary on a case by case basis and
across countries.
Anticompetitive practices A wide range of business practices in which a firm or
group of firms may engage in order to restrict inter-firm
competition to maintain or increase their relative
market position and profits without necessarily
providing goods and services at a lower cost or of
higher quality. These practices include price fixing and
other cartel arrangements, abuses of a dominant
position or monopolization, mergers that limit
competition and vertical agreements that foreclose
markets to new competitors.
Barriers to entry Factors which prevent or deter the entry of new firms

into an industry even when the incumbent firms are
earning excess profits. There are two broad classes of
barriers: structural (economic or innocent) and strategic
(behavioral). Structural barriers arise from basic
industry characteristics such as technology, costs and
demand. Strategic barriers arise from the behavior of
incumbents.
Bid rigging (Collusive
tendering)
A particular form of collusive price-fixing behavior by
which firms coordinate their bids on procurement or
project contracts. There are two common forms of bid
rigging. In the first, firms agree to submit common bids,
thus eliminating price competition. In the second, firms
agree on which firm will be the lowest bidder and rotate
in such a way that each firm wins an agreed upon
number or value of contracts.
Cartel A cartel is a formal agreement among firms in an
oligopolistic industry. Cartel members may agree on
such matters as prices, total industry output, market
shares, allocation of customers, allocation of territories,
bid-rigging, establishment of common sales agencies,
and the division of profits or combination of these.
Cartel in this broad sense is synonymous with “explicit”
forms of collusion, which does not necessarily require a
formal agreement, whether public or private, between
members. Often the terms collusion and cartel are
used somewhat interchangeably. Cartels are formed
for the mutual benefit of member firms.
Competition laws Also known as “antitrust” or “antimonopoly” laws.

Antitrust refers to a field of economic policy and laws
dealing with monopoly and monopolistic practices. The
intellectual basis for antitrust economics or policy is the
sub-field of industrial organization economics which
addresses issues arising from the behavior of firms
operating under different market structure conditions
and the effect that this has on economic performance.
Most antitrust or competition laws have provisions
dealing with structure such as mergers, monopoly,
dominant market position and concentration, as well as
behavior, such as collusion, price fixing, and predatory
pricing.
Competition policy Include competition laws in additions to other
measures aimed at promoting competition in the
national economy, such as sectoral regulations and
privatization policies. Also supervision over the
government policies through competition advocacy.
Consumer welfare The individual benefits derived from the consumption of
goods and services. In theory, individual welfare is
defined by an individual’s own assessment of his/her
satisfaction, given prices and income. Exact
measurement of consumer welfare therefore requires
information about individual preferences. In practice,
applied welfare economics uses the notion of
consumer surplus to measure consumer welfare.
Cooperation Cooperation on competition has two main elements: (i)
provisions to facilitate “case-specific” cooperation on
anti-competitive practices having an impact on
international trade; and (ii) provisions relating to
general exchanges of information and experiences and

joint analysis of global trade-related competition issues
(“institutional cooperation” in OECD terms).
Discriminatory provision Includes treating: (i) a parent, a subsidiary or other
enterprise with common ownership more favorably
than an unaffiliated enterprise, or (ii) one class of
enterprises more favorably than another, in like
circumstances.
Efficiency It relates to the most effective manner of utilizing
scarce resources. Two types of efficiency are generally
distinguished: technological (or technical) and
economic (or allocative). A firm may be more
technologically efficient than another if it produces the
same level of output with one or fewer physical number
of inputs. Economic efficiency occurs when inputs are
utilized in a manner such that a given scale of output is
produced at the lowest possible cost.
Flexibility and
progressivity
In the multilateral context flexibility and progressivity
are qualities for an international agreement. To get
flexibility implies that the framework agreement
recognizes that competition laws cannot and probably
should not the same in all countries; they are
differences in substance as well as in procedure.
Progressivity refers to the commitment to competition –
for example through transition periods– probably
depends on the level of the economic development and
size of the economies.

DISPUTE SETTLEMENT
TERM DEFINITION
Advisory Opinion A nonbinding statement by a tribunal of its interpretation of the
law or a matter submitted for that purpose.
Alternative dispute resolution
(ADR)
A procedure for settling a dispute by means other than litigation,
such as arbitration, mediation, or mini-trial.
Amicus curiae (Latin “friend of the court”) A person who is not a party to a
lawsuit but who petitions the court/tribunal or is requested by
the court/tribunal to file a brief in the action because that person
has a strong interest in the subject matter.
Appellate Body An independent body, such as the WTO Appellate Body, that
hears appeals by a party to the dispute on issues of law covered
in a ruling by a tribunal of first instance, such as a panel.
Applicable law Body of law that the tribunal must consider in rendering a
decision on a dispute or claim.
Arbitration A method of dispute resolution involving one or more neutral
third parties who are usually agreed to by the disputing parties
and whose decision (“award”) is binding.
Cause of action A group of operative facts giving rise to one or more bases for
bringing a claim.
Choice of forum Choice of the jurisdiction or tribunal in which a claim might be
heard.
Claim The aggregate of operative facts giving rise to a right enforceable
by a court/tribunal.
Code of conduct A written set of rules governing the behavior of specified
groups. See Customs Procedures, page 23, where this text may

have a slightly different meaning.
Complaint The initial pleading that starts a civil action and states the basis
for the court’s/tribunal’s jurisdiction, the basis for the plaintiff’s
claim, and the demand for relief.
Conciliation An alternative dispute resolution mechanism in which a neutral
person meets with the the parties to a dispute and explores how
the dispute might be resolved.
Consultations Mechanism by which parties consult or confer on a matter, which
may be a prerequisite before seeking the establishment of a
panel or tribunal to rule on the matter.
Cross-sector retaliation Retaliation (suspension of benefits) exercised in a sector other
than the sector specifically affected by the measure in dispute;
e.g., retaliation in the services sector for a measure affecting
goods.
Mediation A method of non-binding dispute resolution involving a neutral
third party who tries to help the disputing parties reach a
mutually agreeable solution.
New York Convention United Nations Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, done at New York on June 10, 1958.
Nullification or impairment Basis of a claim under the GATT/WTO dispute settlement system,
namely that a benefit accruing to a WTO member directly or
indirectly under the Agreement is being nullified or impaired as a
result of the failure of another member to carry out its
obligations under the Agreement. Non-violation nullification or
impairment is a claim that a benefit is being nullified or impaired
as a result of the application of a measure whether or not it
conflicts with the provisions of the Agreement.
Panel Body of independent experts established to examine and issue
recommendations on a dispute.
Party to the dispute Complaining Party or the Party complained against.

Panama Convention Inter-American Convention on International Commercial
Arbitration, done in Panama on 30 January, 1975.
Roster List of individuals from which the members of panels may or shall
be drawn.
Rules of procedure Rules that prescribe the procedures to be followed by the Panel.
Suspension of benefits Suspension by a Party of benefits or obligations enjoyed by
another Party under an Agreement, such as in response to, or
retaliation for, non-compliance with a ruling or recommendation
by the latter Party. Under the WTO DSU, such suspension or
withdrawal of concessions is subject to prior multilateral
authorization.
Third party A Party that has notified an interest in a dispute proceeding and is
not a Party to the dispute.
WTO Understanding on Rules
and Procedures Governing the
Settlement of Disputes (DSU)
WTO agreement resulting from the Uruguay Round that applies
to consultations and the settlement of disputes between WTO
member countries concerning their rights and obligations under
the WTO Agreement.
GOVERNMENT PROCUREMENT
TERM DEFINITION
Award The formal acceptance of a supplier's bid or proposal by a
government agency. Following such acceptance, the agency
usually issues a purchase order to the vendor reflecting the
award.
Bid An offer or proposal for goods and/or services submitted in
response to a government agency’s invitation.
Bidding documents The set of documents issued by a government agency that
establish the object of the bidding (the technical specifications),

specify proposed contract conditions and establish the bidding
procedure to be followed. In a broader sense, this is the group of
documents that determines the contractual conditions to be
established between the supplier or contractor and the agency.
Contractual/Procurement
methods
Government procurement takes place through different types of
methods or tendering. There are three main types of tendering:
open (or unlimited) procurement, selective procurement
(restricted to pre-selected categories of suppliers, invited to bid)
and limited (or negotiated) procurement, including individual,
sole-source, single-source or direct tendering. In addition to
formal tendering procedures, countries also use “informal”
methods, such as requests for proposals and requests for
quotations (where procuring entities seek detailed technical and
cost proposals, on the basis of which they hold negotiations with
prospective providers) or novel methods of procurement, such as
purchase cards or electronic catalogues, brought forward by the
increasing use by national administrations of information and
communication technologies.
Government Procurement The formal process through which official government agencies
obtain goods and services, including construction services or
public works. It also includes all functions that pertain to the
obtaining of any goods, service, or construction, including
description of requirements, selection and solicitation of sources,
evaluation of offers, preparation and award of contract, dispute
and claim resolution and all phases of contract administration. In
GATT language, government procurement means the process by
which a government obtains the use of or acquires goods or
services, or any combination thereof, for governmental purposes

and not with a view to commercial sale or resale, or use in the
production or supply of goods or services for commercial sale or
resale.
Government Procurement
Agreement (GPA)
A plurilateral agreement negotiated during the Tokyo Round to
ensure that government purchases of goods and services entering
into international trade are based on specific, published
regulations that prescribe open procedures for submitting bids;
to improve transparency in national procurement practices; and
to ensure effective recourse to dispute settlement procedures.
The agreement was renegotiated during the Uruguay Round,
becoming effective 1 January 1996.
Limited tendering/ Direct
contracting
Contracting with a firm that is selected without competition.
Notice of invitation
(Solicitation)
The process used to communicate procurement requirements
and to request responses from interested suppliers.
Open tendering Also referred to as “public bidding,” the formal, public, and
competitive procedure during which offers are requested,
received and evaluated for goods or services and after which the
related contract is awarded to the bidder that complies with the
conditions specified in the notice of invitation. It involves a series
of stages, acts or steps that must follow rules prescribed in the
bidding documents. The procedure consists of: (i) a public
invitation directed to all those with a possible interest in
presenting offers; followed by (ii) an evaluation stage to select
the offer most advantageous to the owner and finally (iii) the

award of the corresponding contract.
Selective tendering A method similar to open/public tendering, except that the
invitations to bid are not issued to the public in general but only
to firms selected by the procuring agency. In general, the same
procedures are used as for competitive bidding. It may include a
prequalification, this is a step in the bidding process in which the
agency first selects the firms to whom invitations to bid will later
be issued.
Procuring entities Government agencies that obtain goods and services by methods
subject to the procurement provisions of the Agreement.
Countries may not subject all entities to the rules of the
agreement, but usually maintain exclusions with respect to
entities within sensitive sectors and those carrying out special
programs.
Performance requirements Special conditions imposed on tenders by government agencies,
sometimes requiring commitments to purchase given supplies
locally, or to ensure the employment of a specified percentage of
local labor and management. See Investment, page 34 and Tariff
and Non-tariff Measures, page 44, where this text may have a
slightly different meaning.
Public bid opening A formal date, time, and location where and when sealed bids
requested by a agency will be opened, announced, and available
for review by the public.
Technical specification A specification that lays down the characteristics of goods to be
procured or their related processes and production methods, or
the characteristics of services to be procured or their related
operating methods, including the applicable administrative
provisions, and a requirement relating to conformity assessment
procedures that an entity prescribes. A technical specification
may also include or deal exclusively with terminology, symbols,

packaging, marking or labeling requirements, as they apply to a
good, process, service or production or operating method.
Transparency provisions Provisions related to procedural steps, such as, but not
exclusively, the initial announcement and dissemination of
information about a tender; the definition and dissemination of
criteria for prospective bidders; the establishment of timelines
and guidelines for preparation and submission of bids;
information about the type of award procedure being used; the
definition and dissemination of criteria used to evaluate the
quality and competitiveness of a given bid; and the availability of
avenues for challenging given awards.
Thresholds In most national legislations, the determination of the type of
tendering applicable to a specific procurement is based on the
value of the procurement. Thresholds often differ for goods,
services and public works. Some international agreements use
thresholds to determine procurement subject to the provisions of
the Agreement.
INTELLECTUAL PROPERTY RIGHTS
INTELLECTUAL PROPERTY RIGHTS
TERM DEFINITION
Author Natural person who creates a literary or artistic work.
Breeder’s rights The essence of plant breeding is the discovery or
creation of genetic variation in a plant species and the
selection from within that variation of plants with
desirable traits that can be inherited in a stable
fashion. The plant breeders' final selections of
superior plants will form the basis of one or more
plant varieties. Plant breeders use all available
technology both to create genetic variation and to
select from within that variation.

Biological diversity Means the variability among living organisms from all
sources including, inter alia, terrestrial, marine and
other aquatic ecosystems and the ecological
complexes of which they are part; this includes